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International Game Technology (IGT) Q3 2021 Earnings Call Transcript

By Motley Fool Transcribing – Nov 9, 2021 at 9:31PM

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IGT earnings call for the period ending September 30, 2021.

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International Game Technology (IGT -2.55%)
Q3 2021 Earnings Call
Nov 09, 2021, 8:00 a.m. ET


  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Good day, and thank you for standing by. Welcome to the International Game Technology Q3 '21 earnings call. [Operator instructions] Please be advised that today's conference is being recorded. [Operator instructions] I would like to hand the conference over to your speaker today, Mr.

Jim Hurley. Please go ahead.

Jim Hurley -- Senior Vice President, Investor Relations

Thank you, and thank you all for joining us on IGT's third quarter 2021 conference call, which is being hosted by Marco Sala, our chief executive officer; and Max Chiara, our chief financial officer. After their prepared remarks, we're going to open the call up for your questions. During today's call, we will be making some forward-looking statements within the meaning of federal securities laws. Forward-looking statements are not guarantees and our actual results may differ materially from those expressed or implied in the forward-looking statements based on a number of factors and uncertainties, including those related to the effects of the COVID-19 pandemic.

The principal risks and uncertainties that could cause our results to differ from our current expectations are detailed on our latest earnings release and in our SEC filings. Also during this call, we may discuss certain non-GAAP financial measures. In our press release, slides accompanying this webcast, and our filings with the SEC, each of which is posted on our investor relations website, you will find additional disclosures regarding these non-GAAP measures, including reconciliations of these measures with comparable GAAP measures. And now I'll turn the call over to Marco Sala. 

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Marco Sala -- Chief Executive Officer

Thank you, Jim, and hello to everyone. By now, you have seen our announcement, and I think you would agree we had a great quarter. Broad-based momentum drove significant improvement in key financial and performance metrics in this quarter. Revenue grew more than 20% with double-digit gains in each business segment.

Lottery same-store sales rose 9% and were up 19% from the third quarter of 2019, demonstrating an improved underlying business growth profile. Global Gaming revenues increased over 30% and the segment profit margin reached the highest level in seven quarters. This was helped by our OPtiMa cost-saving program, which I'm pleased to report we completed during the quarter ahead of schedule. We are now breaking out our digital and betting business, that will provide you with a more comprehensive view of those activities, which delivered the strongest growth in the quarter.

We recently announced some high-profile new hires underscoring our increased focus on the segment and willingness to invest in this fast emerging business. We delivered a significant profit in the period. Operating income was more than double than prior year's level. Adjusted EBITDA of $407 million yielded a margin of 41%, which is among the strongest we have achieved.

Leverage improved to 3.8 times, the lowest level in the IGT PLC history and below the 4x threshold we have been targeting for some time. On the heels of excellent year-to-date results and our solid financial condition, the board reinstated a quarterly cash dividend, signaling their confidence in the company's prospects. It is an important milestone. We are happy to be in the position of returning capital to shareholders.

Diving a bit deeper into Lottery. Same-store sales were strongest in our main U.S. and Italy markets, both up double digits in the period. Our lottery momentum remains strong with the same-store sales up over 50% compared to last year and more than three times Q3 '19 levels.

We recently won several new contracts, including a 10-year facilities management contract with the Connecticut Lottery, where IGT is displacing an incumbent. We are excited to become their trusted growth partner with our suite of world-class lottery solutions. We entered a seven-year agreement to upgrade FDJ's current lottery central system to IGT's advanced Aurora platform, featuring enhanced omnichannel capabilities. This builds on our over 20 years partnership with the operator of the French National Lottery, the fourth largest in the world.

We also secured a new instant ticket service contract with WestLotto. Germany is the largest lottery extending our 13-year partnership. Our cloud-based eInstants platform, the first of its kind went live in Georgia during the quarter. Building on that successful deployment, we intend to roll it out to our other high lottery customers over the next several months.

Our investments in digital are being recognized. IGT's Mobile Lottery Solutions want Lottery Product of the Year at the 2021 International Gaming Awards. It is a nice endorsement of our increased focus in this arena. The year-over-year gains for our global gaming segment are impressive.

We also continue to see sequential improvement in many KPIs. The global installed base were up, led by North American new and expansion activity and good progress with multilevel progressives. Yields are also stronger. On the product sales front, ASP were up nicely, helped by growing demand for our peak series of cabinets.

The improving KPIs are consistent with the overall recovery we are seeing in the market. This, along with OPtiMa savings has driven substantial improvement in gaming profit margins. The [Inaudible] sequentially. Everyone was excited to be back at G2E this year.

While attendance wasn't that of previous [Inaudible] this year's attendees were serious in their intent and customer sentiment was quite good. It was a productive show for us. Among the key IGT highlights was the most robust offer of multilevel progressive we have ever showcased. We had 18 in total at the show, a mix of both leased and for-sale games.

Haywire and Wolf Run Eclipse were among the most popular MLP titles at the show. There was a lot of excitement around our new hardware. We are expanding the high-performing peak family with a supersized Peak65 cabinet, launched in conjunction with the 25th anniversary of the Wheel of Fortune's launch. The new DiamondRS mechanical reel cabinet was another standout, and we expect will extend our leadership in the Stepper category.

And there was tremendous interest in cashless. Our resort wallet and IGT cashless and payment solutions received a lot of positive feedback from potential customers. IGT is unique and well positioned in this area. We are the only company offering a fully integrated turnkey cashless solution.

It marries convenience and ease of use, one wallet, one account, one step. The strength of our offer received important industry recognition, recently being named Product Innovation of the Year at the Global Gaming Awards in Las Vegas, and Technology Provider of the Year at the International Gaming Awards. The creation of a stand-alone digital and betting segment will help you all appreciate the scale, growth profile, and attractive margin structure of the business. We are already a leader in the B2B ecosystem, and that is reflected in the results with revenue up over 50% year to date and reaching a 32% adjusted EBITDA margin.

Margins should strengthen as the business gains scale even as we increase investments to support growth. Success in iGaming comes down to content. Our ability to leverage proven land-based titles in the digital space provides a competitive advantage. We are seeing success -- we are seeing success with long-standing franchises such as Wheel of Fortune, along with the newer titles like Fortune Coin and, we are increasingly focused on developing digital native content to differentiate and enhance our leadership position.

We are also bolstering our offer with third-party content and recently signed a multiyear content distribution agreement with Yggdrasil, a leading creator of digital games. Earlier this week, we announced Gil Rotem joining the company as president of iGaming. In the nearly two decades of industry experience with and bet365, will help drive the strong growth we expect over the next several years. We have an equally impressive new hire in sports betting, where we recently appointed Joe Asher, a long-standing industry veteran, as president of the business.

His knowledge of the market will be a great asset as we focus on rolling out our third key retail in digital solutions across the U.S. Outdoor is an important part of the turnkey retail offer and interest in our CrystalFlex sports betting terminal and PeakBarTop is strong. Players can watch their favorite sports while easily placing sports wagers, enjoying the slots, playing video poker and Keno all on the same machine. It provides a very rich player experience.

The CrystalFlex won top prize in the Best Consumer-Service Technology category at the GGB Gaming & Technology Awards. With the strength of our year-to-date results, we are raising our product outlook. Revenue, profit margins, cash flows and leverage are all expected to be better than pre-pandemic levels. And with a compelling growth outlook across business segments, we are all-well positioned to create significant value for all stakeholders.

Our results would not be possible without the tremendous dedication of the IGT team and their superb focus on our core values. We asked a lot of our people during the pandemic. Now it is the time for us to recognize them. We intend to provide a special bonus to employees not covered by existing incentive compensation plans who were impacted by furloughs and salary reductions last year.

This will amount to about 5% of the annual base salary for our -- sorry, workforce. Sustainability, good corporate citizenship and ESG matters and have always been important to AGT. And our efforts were recently recognized with a reduced interest rate on our term loan facilities. And with today's news of restating a quarterly cash dividend, we are also giving back to shareholders.

This is an important signal of management and the Board's confidence in our financial condition and business outlook. We look forward to expanding on our long-term outlook and providing additional insight into our capital allocation plans at the next week's investor day. Now I'll turn the call over to Max.

Max Chiara -- Chief Financial Officer

Thank you, Marco, and hello to everyone from myself as well. We delivered another strong quarter of financial results in Q3 as demand for our products and services drove revenue higher across all segments. Operating income increased more than 140% year-on-year on high profit flow-through of global Lottery same-store sales growth, including a positive mix impact from Italy lottery sales and strong operating leverage across business segments, primarily associated with savings from the OPtiMa program. A high-level summary of our key financial results as shown here on Slide 11.

The year-over-year comparisons on a quarterly and year-to-date basis highlight the outstanding resilience of our business. Year-to-date, cash from operations increased 78% to more than $600 million and free cash flow more than tripled to $445 million. Our quarter and year-to-date results have been impressive across several key financial metrics, driven by solid revenue growth as well as disciplined cost management including the achievement ahead of schedule of over $200 million in OPtiMa structural cost savings. During the quarter, IGT delivered nearly $1 billion in revenue, over $200 million in operating income and more than $400 million in adjusted EBITDA.

On a year-to-date basis, revenue and profit grew significantly over prior year levels and exceeded pre-pandemic 2019 levels. We achieved operating income and adjusted EBITDA margins of 24% and 43%, respectively, bolstered by higher operating leverage. Now let's review the results of our business segments in detail. Sustained strength in player demand drove global Lottery revenue up 14% to $652 million.

Global same-store sales increased 9% year-on-year and 19% compared to Q3 2019, with growth across many geographies and games. Italy lotteries continue to benefit from strong demand, generating 16% same-store sales growth even after other gaming alternatives gradually return with the reopening of gaming halls at the end of the second quarter. This was primarily fueled by increased instant ticket sales. We also saw nice growth in iLottery revenue as a result of an expanding customer base.

Same-store sales grew a solid 8% in North America and the rest of the world, driven by continued momentum and the benefit of higher jackpot activity. Instant ticket product sales revenue was also up nicely. Strong same-store sales as well as the higher mix of Italy business will generate more revenue per wager led to margins well above the normal range. Operating income increased 19% to $234 million, and adjusted EBITDA was 12% and to almost $350 million with a strong 53% adjusted EBITDA margin.

The progressive recovery continued during the quarter with Global Gaming delivering the highest quarterly revenue and profit levels since 2019. Revenue rose 34% to $289 million, driven by solid increases in active units, yield, number of machine units sold and ASPs. Terminal service revenue increased 44% on a higher number of active machines and growth in total yield. The installed base in North America increased over 500 units sequentially, driven by North America new and expansion activity and additional placements of multiyear progressive units.

In the rest of world, the installed base was up over 400 units year-on-year and stable sequentially. Currently, over 95% of our U.S. and Canada casino installed base is active with closures still impacting some cruise ships and capacity restrictions still limiting the number of active machines in Canada. We sold around 5,700 units globally in the quarter compared to about 3,700 units in the prior year.

Unit shipments were driven primarily by strong replacement demand from casino and VLT customers. Profitability measures were significantly higher in the quarter as revenue growth and savings realized from the OPtiMa structural cost savings program propelled higher operating leverage. Today, we are reporting the results of Digital & Betting as a dedicated segment for the first time. We decided to create a stand-alone segment, given the leadership positions we hold as a B2B provider in the market, and in an effort to provide greater visibility to this high-growth business.

Digital & Betting results were previously included as part of Global Gaming. We recently filed recast historical financial information related to this resegmentation with the SEC, which you can find on the Investor Relations section of our website. In the third quarter, revenue increased 37% year-on-year to $43 million, driven by double-digit increases across both iGaming and sports betting. Growth in iGaming was primarily driven by expansion to new markets, including Michigan, Alberta, Finland, and Sweden, but also saw a nice contribution from existing customers in jurisdictions like New Jersey and Pennsylvania.

While sports betting was mainly bolstered by existing customers in the quarter, we are rapidly expanding our footprint with many new customers recently announced. High flow through of revenue growth drove profitability significantly higher, with operating income doubling over the prior year to $12 million and adjusted EBITDA increasing 66% to $15 million. The Digital & Betting segment delivered 36% EBITDA margins in the quarter bolstered by lower jackpot funding and the timing of marketing spend. This is an impressive achievement from an emerging business.

We delivered $113 million in cash from operations and $66 million in free cash flow during the third quarter. Cash flow in the quarter were impacted by the timing of collection cycles in Italy and higher cash outlays as working capital items returned to more normal levels. Very strong year-to-date free cash flow of almost $450 million, coupled with approximately $900 million in net proceeds from the sale of our Italy gaming business has allowed us to reduce our net debt by over $1.2 billion this year. We received EUR 100 million payment on the Italy asset sale during the quarter, ahead of the December 2021 to date.

As a reminder, the final payment of EUR 125 million is due in September 2022. The leverage has improved to 3.8 times, well below pre-pandemic levels and exceeding our target of four times. And as Marco mentioned, IGT board of directors has reinstated a $0.20 per share quarterly cash dividend to be paid in early December. Our credit profile has greatly improved over the last year due to a significant reduction in net debt increased liquidity and extended debt maturities.

During the quarter, we successfully amended and extended our term loan facility, adding the unique feature of an ESG margin adjustment. This is a sound testament to our sustainability commitment. I am proud and happy to say that we have already achieved an increase in our ESG rating, lowering our borrowing cost another $0.5 million on an annual basis. In summary, I would like to highlight that we reached a significant milestone this quarter with the year-to-date revenue and profit exceeding pre-pandemic results during the same period in 2019.

The performance of each of our business segments has been impressive with Global Lottery achieving record results on strong player demand, global gaming delivering sequentially higher results each quarter since 2019 and Digital & Betting drives significant growth in a nicely profitable business. We achieved our '21 goal of delivering over $200 million in OPtiMa structural cost savings ahead of schedule and expect more benefits to materialize as the Global Gaming segment continues to scale. We'll talk a bit more about this next week during our investor day. We generated record level of cash flow so far this year, which allowed us to significantly pay down debt and improve our leverage to 3.8x.

And lastly, IGT board of directors have instated a $0.20 per share quarterly cash dividend, signaling my confidence in our long-term outlook and providing a nice return of capital to shareholders. Now let's turn to Slide 19, where we have provided our 2021 full year outlook. On the back of very strong year-to-date results, we are raising our outlook as we currently expect to deliver revenue of approximately $4.1 billion, operating income of about $900 million and total depreciation and amortization of between $700 million and $725 million. This outlook reflects our expectation that Q4 revenue and profit will be pretty much similar to Q3.

As a reminder, the first half of 2021 benefited from some discrete items in our Lottery business between gaming hall closures in Italy, elevated multi-stage app productivity and LMA performance in the U.S. This represents a positive impact of about 300 basis points on our operating income margin for the full year. Free cash flow for the full year is expected to reach record or near record levels with cash from operations expected to range between $850 million and $900 million and capex coming in below $300 million. We also expect leverage to remain below four times, given the profit and cash flow guidance I just mentioned.

While it is unfortunate that we cannot be physically together next week for our investor day, we are still very much looking forward to the virtual event where Marco and I, along with other members of the IGT senior management team, will share the company's business strategy, long-term growth prospects and capital allocation plans. That concludes our prepared remarks. Operator, would you please open line the questions.

Questions & Answers:


[Operator instructions] Your first question comes from Carlo Santarelli with Deutsche Bank.

Carlo Santarelli -- Deutsche Bank -- Analyst

Good morning, everybody. Hey. Just one for me as I know there's some things you guys kind of want to couch until next week. But Max, you talked a little bit about kind of the benefit in the first half of this year of 300 basis points to the operating margins.

And my question was kind of along those lines. As you guys think about next year and, obviously, a tough comparison in the first half and obviously, really strong results here in the second half. How are you kind of thinking about the cadence throughout the year?

Marco Sala -- Chief Executive Officer

Looking about this year, I think we need to elaborate a little bit on the performance of Lottery. That is the focus of your question. And let me say that in a more stable environment in recent months, I'm talking about Q3 even plus October, we are seeing Lottery sales that are structurally above the pre-pandemic level. This implies an accelerated growth profile and higher player consumption compared to historical trends.

We believe that the second half of this year, net of Jackpot represents a new baseline for the industry. There are some discrete benefits we mentioned in our prepared remarks, such as the standard closure of gaming roads in Italy, significant LMA incentives and the related Jackpot activities that happened during the first half of the year. This creates a high comparison for us next year. But the net of those items, we believe Lottery should grow at a net single-digit rate.

And since we see for the overall performance in 2022, we see a good growth expected for gaming. We see a strong growth expected for Digital & Betting and, therefore, we expect that the next year revenue and profit to be substantially aligned with 2021.

Max Chiara -- Chief Financial Officer

And Carlo, this is Max. If you do the math on the 300 basis points, you basically can get to about $165 million of revenue and about $140 million of profit which is kind of split 50-50 between Italy and the U.S. on the discrete benefits.

Carlo Santarelli -- Deutsche Bank -- Analyst

Thank you. That's very helpful. 


Your next question comes from Chad Beynon of Macquarie.

Chad Beynon -- Macquarie Group -- Analyst

Good morning. Thanks for taking my question and congrats on the results. Wanted to ask about the dividend, how you arrive to the $0.20, which is what you were distributing pre-pandemic. Is it related to kind of a free cash flow generation, free cash flow estimate? I know before, I think it was around a 30% payback ratio.

Just a little bit more color in terms of how you were able to announce that positive result. Thanks. 

Max Chiara -- Chief Financial Officer

We are firm believers of simplicity of the communication. So historically, the company has delivered $0.20 per share per quarter. And that was kind of a number that was baked into the expectations of the capital market. If you look at the stock price today, that represents something north of 2% of yield on an annualized basis, 2.5% today.

Hopefully, the yield is going to go down as the stock price potentially may increase down the road. But having said that, I think this is kind of more or less in line with similar cohort companies in our peer group. When you look at the S&P 500 dividend payout statistics as well as across the different sub industries in our pleasure and entertainment, a large cohort. In any case, Chad, we will provide more insights into our capital allocation plan next week at the investor day.

Chad Beynon -- Macquarie Group -- Analyst

OK. Great. Appreciate it. And then on the OPtiMa plan, Max, you mentioned that you hit all your targets and you achieved everything.

I'm sure there's still more to do, and you'll continue to optimize margins there. How should we think about additional flow-through on gaming business coming back? And I guess the one piece of the business, just wanted to ask about, it seems like the installed base on the rest of world is still not recovered here. Anything to kind of help us understand when we should expect for that business, particularly the yields to be back to pre-pandemic levels? Thank you.

Max Chiara -- Chief Financial Officer

So when we crafted the program, we wanted to make sure that we were able to get to the milestone within a year. And the upside potential could be generated by -- as the volume scales into the gaming business going forward, which obviously is going to be a combination of North America and international, as you also highlighted. So we expect that there is potential out there for more savings to come. But we also need to keep in mind at the same time that we have to face supply chain constraints, which are able to offset with the incremental savings that we have achieved so far.

And we expect that, obviously, also to represent a good buffer for next year. But I think we will elaborate more on this next week at the investor day. 

Marco Sala -- Chief Executive Officer

Regarding the installed base in international is very much related to the situation of the different countries. As you know, the countries are generally open, but there are some mostly capacity-type restriction in many of the informational jurisdictions. So it will take some more time to recover those jurisdictions, but we feel that it will happen over the next quarters.

Chad Beynon -- Macquarie Group -- Analyst

Thank you, Marco. Thank you, Max. Appreciate it. 


Your next question comes from Barry Jonas of Truist.

Barry Jonas -- Truist Securities -- Analyst

Great. Thank you. I wanted to start with the strong Lottery trends you're seeing. Can you give a little more color on what you attribute those higher play levels? Is it content? Is it COVID or consumer savings rate? I just want to get a sense on your thoughts around the long-term sustainability. 

Marco Sala -- Chief Executive Officer

I think this is a very good question. And what we noticed is that consumer were exposed to an enlarged offer of Lottery products, and they bought more during the pandemic. The result of it is that they enjoyed the large offer of Lottery games throughout the jurisdictions. And we tested it through consumer research, and we carried out our researches in the U.S.

as well as in Italy and the players stated that they enjoyed playing these games. And they also anticipated the intention to maintain a higher level of spend over time. And this is what is all getting up now that brings us to consider the trend we are seeing, especially in the second half of the year as the new base for Lottery. We cannot, of course, consider the first half, especially in Italy where have the rest of the gaming offering was closed.

But what we are seeing now that we are measuring against '19 provides us a level of comfort regarding what the reserves indicated some months ago, and we are experiencing in now four months of strong results and customer satisfaction.

Barry Jonas -- Truist Securities -- Analyst

Great. Thanks. Thanks for that, Marco. And then just as a follow-up, how are you thinking about M&A here? Are there any areas that interest you, either bolt-on or something more substantial? Or you're pretty happy with sort of the organic path?

Marco Sala -- Chief Executive Officer

Generally speaking, we are happy with what we have. We will express some indication during our investor day, but it's clear that the digital area is where some selected transaction, M&A transaction could well reinforce our future outlook.

Barry Jonas -- Truist Securities -- Analyst

Great. Thank you.


[Operator instructions] Your next question comes from Domenico Ghilotti of Equita.

Domenico Ghilotti -- Equita -- Analyst

Good morning. My first question is on the Italian lotteries because you were commenting on the call that the growth was particularly strong in Instant Tickets and the Lotto performance was mostly with Q3 2019. So I'm trying to understand what is driving particular the Instant Ticket performance? And if you see this new base as a sustainable as you had mentioned also for the general answer on the Lottery. And the second question in the guidance.

So if I understand properly, so for Q4, you are expecting something more similar to Q3. So this would point to, say, more in the 2.7 EBITDA for the full year than really 1.6 that is the new guidance. So it's just an approximation of a broad approximation of the full year. And I'm trying to understand if there is any specific topic that is embedded in your guidance, for example for the ForEx or the payment -- the incentive payments that you mentioned before to your employees you did include in the 2021 number? 

Max Chiara -- Chief Financial Officer

OK. So the main -- I'll take the second part of the question and then pass back to Marco for the first question about the retail offering trend. So in terms of our revised upgraded outlook for 2021, just to keep it simple, I would say that the look reflects the normalization of our Lottery business after the exceptional H1 performance that we mentioned previously in the call, included several discrete benefits. But on the opposite side, it also accounts for the possibility that despite a typical seasonal strength in our product delivery on the gaming side, which comprised -- typically is slated for the final part of the year, we have to face potential some delivery delays due to supply chain constraints.

So we have a very strong finance in our hand right now of activity. But we need to obviously balance the availability of components and the delivery times as this whole supply chain complications have substantially added four weeks on the normal go-to-market time of delivery for our product pipeline. Net-net, again, as we said, we expect Q4 to be substantially in line with Q3 with effectively, as you clearly said, highlight an EBITDA for the full year around [Inaudible].

Marco Sala -- Chief Executive Officer

Regarding the question on lotteries, worldwide, the trend of Scratch & Win has been more robust than the group-based games, and now it's happening the same. You are referring to Italy. You are perfectly right. I mean, the performance of Instant Tickets is stronger compared to the '19.

Lottery is better than the pre-pandemic but not with the same trend. So this is what we are considering the baseline and very good Instant Ticket performance that will be maintained through a lot of innovation that we intend to provide the market. But at the same time, also sounding Lotto performance well. By the way, we intend, next year, especially in Italy to innovate -- to sustain through good innovations, especially in the second part of the year.

And this is somehow sustaining the outlook I have generally provided.

Domenico Ghilotti -- Equita -- Analyst

OK. Thank you. And just to be sure on the ForEx or are you not taking -- so are you updating taking into account the current effects in your new guidance?

Marco Sala -- Chief Executive Officer

The new guidance is effectively consistent with the current rate expectations that are out in the market.

Domenico Ghilotti -- Equita -- Analyst

OK. Thanks again. 


[Operator instructions] Your last question comes from David Katz.

David Katz -- Jefferies -- Analyst

Hi. Good morning, everyone, and thanks for taking my question. I wanted to ask about specifically the U.S. installed base because -- and my sense is it's been discussed a decent amount, but it is up for the first time I think, in the last several quarters.

And I just wanted to get a little more insight as to is that product-driven? Is that specific opportunities and without -- at the risk of asking for guidance, is this what you'd consider an ongoing inflection point in that number of units?

Marco Sala -- Chief Executive Officer

The installed base this year in North America benefited from two main factors. The first comes from the MLP expansion. As you know, we have invested seriously. We have presented a lot of our new products in G2E, and this is helping us to sustain our installed base.

The other part that is around half is coming from new casino opening and expansion activities, mainly in Canada. Those are there. When I look at the installed base, we think that you have to take account, sorry, going forward some market structural changes in the WLA markets. I'm referring to New York there or Rhode Island, that are expected to impact our installed base in Q4 and next year.

And -- but if we exclude these jurisdictions, we expect that in 2022 to be broadly in line with '21. Obviously, there will always be some volatility individual quarters. But generally speaking, I guess, that the outlook we can provide is net of these three jurisdictions whereas an RFP has changed a little bit the structure of the market. What we are doing on the products and the feedback we are getting from customers are giving us confidence in providing an outlook over the next quarters of 2022 of relative stability net of these three jurisdictions.

David Katz -- Jefferies -- Analyst

Understood. And if I can ask a similar question for just a little more insight in terms of the yield on those or the win per day. So difficult for us to model these coming out of the pandemic since demand has been rather intense and concentrated. Anything you can share to help us think about that.

Marco Sala -- Chief Executive Officer

But look, the yield, as you know, now are aligned. The overall yields in North America of Q3 are aligned with Q3 '19. That is a great achievement and are higher than the previous quarter. So we tend to consider to look at yields with some stability the level we have achieved so far.

David Katz -- Jefferies -- Analyst

Understood. Thanks very much. 

Marco Sala -- Chief Executive Officer

Thank you, David.


There are no further questions. I will now turn the call back over to you, Marco Sala.

Marco Sala -- Chief Executive Officer

Thank you for joining us today. We appreciate your interest in IGT. Our third quarter and year-to-date results reflect strong revenue and profit momentum across the portfolio. This is improving cash flows and balance sheet, allowing us to resume returning capital to shareholders.

I hope you can join us on next Tuesday, November 16, for our Investor Day, where we look forward to expanding on our longer-term growth outlook and capital allocation plans. Until then, have a great day.


[Operator signoff]

Duration: 44 minutes

Call participants:

Jim Hurley -- Senior Vice President, Investor Relations

Marco Sala -- Chief Executive Officer

Max Chiara -- Chief Financial Officer

Carlo Santarelli -- Deutsche Bank -- Analyst

Chad Beynon -- Macquarie Group -- Analyst

Barry Jonas -- Truist Securities -- Analyst

Domenico Ghilotti -- Equita -- Analyst

David Katz -- Jefferies -- Analyst

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